Lib Dem Voice has polled our members-only forum to discover what Lib Dem members think of various political issues, the Coalition, and the performance of key party figures. Some 550 party members responded, and we’re currently publishing the full results.
Cut income tax and VAT but raise taxes on property: that’s the message from Liberal Democrat party members in our latest survey. Some answers to our tax questions are unsurprising, such as the North Korean style (or, for older readers, the Albanian style) majority in favour of raising the personal allowance threshold for income tax to £12,500, approximately equivalent to what a fulltime worker on the minimum age earns.
It is notable though that although a tax on house values is heavily supported, there is greater support for simply adding extra bands on to Council Tax. One of the most common comments I’ve heard about tax from Liberal Democrats in South West London is bafflement as to why Vince Cable doesn’t push for this rather than a mansion tax. These findings suggest that if he did, he would find (even) more support in the party.
Opposition to cutting the top rate of income tax is very strong, but – in the one finding that goes against what Liberal Democrat ministers have been calling for in public – there is a significant majority in favour of cutting VAT.
LDV asked: Would you support or oppose the following tax changes?
Raising the personal allowance threshold for income tax to £12,500
Strongly support 76%
Tend to support 20%
Tend to oppose 4%
Strongly oppose 1%
Net 91% support
Introducing additional Council Tax bands for higher-value properties
Strongly support 60%
Tend to support 30%
Tend to oppose 9%
Strongly oppose 2%
Net 79% support
Introducing a new annual tax on houses worth over £1 million
Strongly support 44%
Tend to support 36%
Tend to oppose 15%
Strongly oppose 5%
Net 60% support
Cutting VAT from 20% to 17.5%
Strongly support 24%
Tend to support 40%
Tend to oppose 29%
Strongly oppose 8%
Net 27% support
Abolishing the top 50p rate of income tax on people earning over £150,000
Strongly support 3%
Tend to support 13%
Tend to oppose 26%
Strongly oppose 57%
Net 67% oppose
- Over 1,200 Lib Dem paid-up party members are registered with LibDemVoice.org. Some 550 responded to the latest survey, which was conducted between 11th and 15th September.
- Please note: we make no claims that the survey is fully representative of the Lib Dem membership as a whole. However, LibDemVoice.org’s surveys are the largest independent samples of the views of Lib Dem members across the country, and have in the past accurately predicted the winners of the contest for Party President, and the result of the conference decision to approve the Coalition agreement.
- The full archive of our members’ surveys can be viewed at www.libdemvoice.org/category/ldv-members-poll
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8 Comments
I’m a simple soul.
Collectively, the banks owe every man woman and child around £20,000.
So if the Government issued us all a £20,000 voucher, mortgages/credit card debts could be repaid, tuition fees paid, contributed to a pension or given to charity.
Wouldn’t this recapitalise the banks, reduce personal debts, free up disposable income for other purchases and thus boost growth??
Or is that just too simple\?
Might I suggest that a better idea than simply raising the Income Tax threshold to £12,500 would be to link it directly to what a full time worker earning minimum wage would earn?
In that way you wouldn’t need to amend the threshold every few years, it would simply increase by the same amount as minimum wage.
That sounds sensible – no tax for 40 hours a week on minimum wage, and set it to automatically rise with the minimum wage.
If we want to make moves towards a Land Value Tax, the first step is to uphold our manifesto pledge to reform business rates to a land value system. That would create the necessary institutions and infrastructure to easily introduce LVT to other areas.
I think I supported raising tax allowances, but this is futile if we penalise earnings in other ways, for example through means-tested housing, family, invalidity, pensions and other benefits, and now means-tested tuition fees waivers, etc.
It is the marginal impact on all taxes, NICs and clawback of benefits we need to be keeping down for low and middle earners. So I think the planned universal benefit and citizens pension are much more important than raising tax allowances.
The problem with the mansion tax is that any proposed threshold (such as £1m) is arbitrary, introduces anomalies and unfairness (why penalise one landowner with a single property of £5m but not one who owns 5 properties?), and makes it too easy to avoid (eg by property-splitting). Integrating with the council tax system tackles this.
What about abolishing higher rate relief on pension contributions. Whatever happened to that idea?
I’m really pleased to see public transport so high up on the list, too. This is a clear differentiator between us and the Conservatives, and an area that I feel we are perhaps failing in a bit as coalition partners, despite us having a minister in the department. In the coalition agreement it states that
‘We are committed to fair pricing for rail travel’
This has been interpreted to mean that rail travel should be made significantly more expensive as it is unfair for people who choose to drive to subsidise those that opt to take a train. This is ludicrous and is counter to what we should be aiming for. Also, I feel a little uneasy about the part in the coalition agreement which offers longer term franchises as this reduces the only element of competition in the current system and makes a mockery of the point of privitising our railways in the first instance!
True competition would be the only way to allow the consumer to have their say in the current set up. I’d like to be able to give my train fare for First Capital Connect to another, better performing train company somewhere else in the country. I’m sure if people started to do this en mass then they would very quickly buck their ideas up and ensure their services were improved.
Regarding property taxation, why not simply switch from business rates and council tax to local LVT? Then we wouldn’t need a mansion tax, and land taxation would work as a single system with a single tax rate. This is urgent not least to get developers to stop hoarding land with planning permission (under LVT land with planning permission would be taxed at the same rate as if it had been built on, so there would be very good reasons to build as soon as planning permission has been granted).
@nigel quinton: We did manage to get the pensions tax relief system improved, though not in the way we had proposed. Higher rate tax relief still exists, but the maximum relief anyone can get in one year has now been cut to £50,000 from £255,000 (!) previously. This should substantially reduce the amount of tax relief going to the very well off. I personally think abolishing higher rate relief would have been a more elegant and more easily understood solution, but as we all know governing in Coalition involves sacrifices 😉
Niklas,
the problem with local LVT is whether the rates are set centrally, whether it is collected locally or centrally, and therefore whether the sums are distributed according to need or ability.
The problem is that you can’t start with a blank slate. Over the longer term it will change the system of incentives for development, but it is impossible to introduce without transitional arrangements, and especially so while the economy isn’t booming.
You might compare areas at opposite ends of the economic spectrum, say Middlesborough and Kensington & Chelsea – either a system of national transfers is required or you’ll be giving either a tax advantage to the already wealthy or you’ll be strangling the services provided by the poorer council.